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Andrew Hore – Quoted Micro 26 October 2020

AQUIS STOCK EXCHANGE

Truspine Technologies (TSP) says that the latest tests of Cervi-Lok, which is a spinal stabilisation device, have been positive. The tests used a computer-generated model and it showed that Cervi-Lok had a reduction in range of motion that was better than existing screw-based fixation systems. FDA clearance is expected early next year.

Vulcan Industries (VULC) is acquiring the business and assets of Romar Process Engineering for £550,000 in cash and shares. Romar is a metal fabrication business and in the nine-months to July 2020 it made a pre-tax profit of £202,000 on revenues of £732,000. The group will be able to undertake larger contracts and some production will be transferred to the Romar facility. The exclusivity period for the proposed acquisition of E Lowe has been extended.

Early Equity (EEQP) has bought a 1% stake in Lotto Studios for £50,000. Lotto licences entertainment and sports brands for lottery and casino games. Early Equity believes that it can help with opportunities in Asia.

Gunsynd (GUN) has sold its 600,000 shares in Bunker Hill Mining raising £164,000. The investment company has reinvested £146,000 in Empress Royalty Corp.

Graham Lyon has stepped down as non-executive chairman and Majken Korsgaard has resigned as non-executive director of SulNOx Group (SNOX) and this means that trading in the shares has been suspended because there is no independent director. Nicholas Nelson has been reappointed as a director. Shipleys has resigned as auditor. Resolutions allowing the company to issue more shares were not passed at the AGM.

Tectonic Gold (TTAU) says that it is progressing towards drilling at the Specimen Hill prospect in Queensland. Samples have returned assays of more than 3.5g/t gold and more than 45g/t silver.

Chairman Robert Sutcliffe has been buying shares in DXS International (DXSP).

Rural Broadband Solutions (RBBS) has started trading following the reverse takeover of Secure Web Services by SAPO. Chris Akers has a 3.29% stake.

Shares in Coinsilium Group Ltd (COIN) have started trading on OTCQB Venture Market in the US.

AIM

Vianet (VNET) says that interim trading was ahead of Covid-19 revised expectations. There has been a month-on-month improvement in cash and profit during the period. New restrictions on hospitality outlets could hamper progress. The interims will be published on 8 December.

Full year figures from Tristel (TSTL) were slightly better than anticipated. The disinfection products supplier increased revenues by 21% to £31.7m and a 27% rise in underlying pre-tax profit to £7.1m. Profit growth will be held back this year by additional investment in the US, where there should be positive news about FDA approval of products.

C4X Discovery (C4XD) has raised £15m at 14p a share. This has nearly doubled the number of shares in issue. The cash will provide a strong financial position for C4X when it is negotiating with potential partners and strategic collaborators. It will also fund the development of potential drugs. that The cash should last for at least 12 months. Indivior has started a phase I clinical trial for C4X_3256 for the treatment of opioid dependence. The trial will last until the end of the year and there will be data in 2021.

Judges Scientific (JDG) is acquiring Korvus Technology, which supplies vapour deposition systems, for an initial £2.64m. This has sparked a small upgrade to the 2021 pre-tax profit forecast taking it to £15.2m.

Gold recovery services company Goldplat (GDP) has increased profit from activities in South Africa and Ghana. The sale of the Kilmapesa mine should be completed by December.

Rare books supplier Scholium (SCH) made a small interim loss. Shapero Rare Books increased its online activity. There will be annual savings of more than £100,000 from moving to new premises.

Orchard Funding (ORCH) has decided to withdraw its application for a banking licence.

Seeing Machines (SEE) has signed a memorandum of understanding with L3 Harris Technologies that could take the company’s computer vision technology into the flight simulator market.

Immunodiagnostic Systems Holdings (IDH) released its normal interim trading statement at 4.35pm on Friday. Covid-19-related sales are still small.

MAIN MARKET

Strong third quarter trading has helped LED lighting and wiring accessories supplier Luceco (LUCE) to increase its guidance for full year operating profit from £23m to between £28m and £30m.

Contango Holdings (CGO) has raised £1.8m at 5p a share and acquired the Garalo gold project in southern Mali for $1m, with $100,000 paid and the rest due in February. The rest of the cash will finance the development of the project so that gold production can start before the end of 2021. Capital costs of $1.2m are expected with further finance of $4m being sought to build up production. Target production is 30,000 ounces per year. The non-independent resource is 320,000 ounces of gold at an average grade of 1.5g/t. Costs should be less than $1,000/ounce.

Aircraft lessor Avation (AVAP) increased revenues by 14% to $135.3m and there was a full year pre-tax profit of $14.6m after a net impairment charge. Mitigating lender agreements have been made with clients.

Edale Capital has sent a requisition notice to InnovaDerma (IDP) in order to force an AGM re-election vote for two existing directors and to propose a new director.

Property investor Town Centre Securities (TOWN) says that it collected 75% of rents in the latest quarter with 10% deferred. Since June, £41.2m has been raised from retail property disposals.

Andrew Hore

Andrew Hore – Quoted Micro 31 August 2020

AQUIS STOCK EXCHANGE

KR1 (KR1) has made two more investments. There is a further investment of $100,000 in the cross-chain finance hub Acala Network in return for 153,846.15 ACA tokens at 65 cents each. KR1 now holds 1.02 million ACA tokens. That stake is valued at $663,000. There is also a new investment in MetaCartel Ventures Decentralised Autonomous Organisation. KR1 received 4,938 MCV shares for its $199,000 investment.

Imperial X (IMPP) plans to buy mineral assets and investments and a placing is raising £750,000 at 2.5p a share. The purchases involve the issue of more than 245 million shares plus 8.71 million warrants exercisable at 5p a share. Trading in the shares has been suspended until the acquisitions are completed. Imperial X is buying Howson Ventures Inc, plus assets from Anglo African Minerals, Cloudbreak Discovery and Cabox Gold. Howson owns the Rupert Minerals property in British Columbia and an investment in Anglo African Minerals, which holds licences in bauxite projects in Guinea.  

Gunsynd (GUN) says that its investment in ASX-listed Eagle Mountain is “well in the money” and it has the cash it requires for its immediate needs even though the disposal of the stake in Oyster Oil and Gas has still not been completed. Gunsynd invested £110,000 in copper/gold explorer Eagle Mountain at A$0.13 a share and the price has risen to A$0.24. Rincon Resources has appointed stockbrokers for its proposed listing on ASX. Gunsynd has invested £138,000 in Rincon and has a 28% stake. Spirits company Human Brands also still hopes to float. Nickel project developer Sunshine Minerals is being acquired by Malachite Resources. Gunsynd will receive 1.26 million shares in Malachite with further deferred consideration of 1.64 million shares.

IamFire (FIRE) is raising £5.5m gross through a discounted capital bond and it is participating in a fundraising for social commerce platform WeShop ahead of a future listing. The bond is being issued at a discount of 78.73% and net proceeds of £4.4m have been received. IamFire is providing £4.5m of a £9m convertible loan to WeShop. This has an interest rate of 8% and lasts for 36 months. A flotation is one of the conversion events and the conversion would be at a 20% discount to the flotation share price. There is also an exclusive option to subscribe for a 10% stake in WeShop at a pre-money valuation of £25m. This would involve an investment of £2.78m.

Primorus investments (PRIM) has invested £875,000 in WeShop. Primorus has made realised and unrealised gains £3.55m in the six months to June 2020. Greatland Gold (GGP) is the main reason for this. The NAV increased to £8.1m compared with a £4.3m market capitalisation.

BWA Group (BWAP) has agreed to sell its investment in Kings of the North Corp to St George’s Eco-Mining Corp, which sold it for £4.66m. The convertibles issued to St George’s will be cancelled and they amount to £4.3m. St George’s will issue 1.5 million shares and transfer 2.5 million warrants to BWA. St George’s is keeping its 21% stake in BWA.  

There was a £673,000 cash outflow at Cadence Minerals (KDNC) in the six months to June 2020. A cash raising means that there was £2.38m in cash at the end of the period.

NQ Minerals (NQMI) plans to undertake exploration work at the Hellyer mine, possibly as early as October/November this year.

Inqo Investments (INQO) increased annual revenues from R23.8m to R24.4m, but the loss increased from R2.5m to R6.1m. That was partly down to an inventory write-down of R1.44m and higher depreciation. Last year’s Bee Sweet honey harvest was one of the largest ever. The lodge at the Kuzuko Private Game Reserve had high occupancy rates before COVID-19. All the other activities have also been hit since the end of February.  

Eurocann International (BUD) intends to amend its investing strategy and change its name just over one year since it changed it from Valiant Investments.

SulNOx Group (SNOX) has appointed Allenby as corporate adviser.

AIM

Vianet (VNET) says that customer pub sites that have resumed operations have increased from 56% to 80% over the past six years. Vianet continues to offer reduced recurring charges to both closed and reopened customers. Customer demand for data analytics is recovering. The smart machines division says two-thirds of customer vending machines are in operation and generating normal levels of revenue. There have been orders for more than 1,9000 new orders for telemetry and contactless units during lockdown.  

Hostels operator Safestay (SSTY) is taking additional cost saving measures due to the continued uncertainty. Occupancy rates are running at around one-quarter and it is higher in those hostels opened earlier. Safestay has available overdraft facilities but these could run out by early next year if all hostels are not reopened by October and occupancy levels fall below 20% later this year. An occupancy rate of 57% is required for a hostel to breakeven. Sales of freeholds or terminating loss-making leases are being considered. Interim results will be published on 24 September.

Integumen (SKIN) is making an all-share offer for Modern Water (MWG) that values the latter at £21.25m. Integumen plans a ten-for-one share consolidation and it is offering one of these new shares for every ten Modern Water shares. Integumen produces test kits for Modern Water.

Drug discovery company C4X Discovery (C4XD) says that Indivior has started a phase I clinical trial for C4X_3256 for the treatment of opioid dependence. The trial will last until the end of the year, but there will be no data until 2021. C4X is making progress in identifying a candidate for the treatment of IBD and it has reached the lead optimisation stage for the treatment of Psoriasis. A collaboration with the GEN-COVID consortium, which will use C4X’s Taxonomy3 mathematical analysis technology to assess the role of genetics in disease susceptibility.

Dekel Agri-Vision (DKL) says that milling equipment has been delivered to the raw cashew nut processing project in Cote d’Ivoire. The mill should be commissioned in the second quarter of next year.

Grant Thornton has managed to persuade the courts to reduce the damages owed to AssetCo (AST) from £29.8m to £20.8m. Including interest and costs the payment should be £25m.

President Energy (PPC) has formed a renewables division. There are opportunities in wind, solar, hydro and biomass in Argentina. President has commenced a workover programme on oil wells and there are plans to drill two new wells.

MAIN MARKET

Packaging supplier Macfarlane (MACF) reported a 2% decline in interim revenues to £105.6m. The second quarter decline was much lower than for the UK economy, helped by increasing exposure to ecommerce. Increased bad debts led to a 5.5% fall in pre-tax profit to £3.62m. An interim dividend of 0.7p a share is proposed. There could be a greater decline in full year profit, although the business will still be cash generative. Arden forecasts a fall in pre-tax profit from £14.4m to £11.1m.

BATM (BVC) has signed up its first tier 1 NFVTime virtual networking customer. The Asia-based telecoms company has signed up for an initial three years will provide a reference site for the technology. This contract could be a significant revenue generator in the years to come and follows the recent proof of concept trial with ARM and Vodafone.

Anglesey Mining (AYM) has raised £200,000 at 1.6p a share. The cash will be invested in studies for the development of the Parys Mountain zinc, copper, lead, silver and gold mine. Management is also assessing other projects.

Andrew Hore

Andrew Hore Quoted Micro 16 December 2019

NEX EXCHANGE

Capital for Colleagues (CFCP) is investing in new portfolio company The Security Awareness Group Ltd (TSAG), which was established to acquire an existing business that has been trading for more than two decades. It provides training to ensure than employees are aware of cyber security and potential for human error. The £405,000 investment in loans, preference and ordinary shares, will enable the acquisition to be completed and leave Capital for Colleagues with a 34% stake. Management will own 51% and an employee ownership trust the rest.

Fuel emulsifier technology developer SulNOx is joining NEX on 17 December and it will be valued at £42.3m at 50p a share. SulNOx originally said it planned to join NEX during the spring when it raised £550,000 in pre-IPO funds. It has developed a process that can emulsify hydrocarbon fuels, such as diesel and heavy oils. The products can reduce Nitrous Oxide, Carbon Dioxide and Sulphur Oxide gases and particulates, as well as making combustion more efficient. The emulsifier can be used in existing engines.

Health property developer Ashley House (ASH) is exploring opportunities for modular affordable housing. Overheads have been reduced but the company says that it retains its core team and has appointed Paul Williamson as head of the modular activities. Adrian Wright, who is the largest shareholder with a 13.4% stake, has been appointed to the board.

Primorus Investments (PRIM) has met with the management of AIM-quoted investee company Greatland Gold (GGP) and it says that it believes that the Havieron gold/copper deposit may host more than 20 million ounces. Further share acquisitions are possible. Primorus currently owns 37 million shares at an average cost of 1.71p each, which is slightly higher than the market price. Newcrest Mining is farming-in to Havieron. Six rigs will be working on the project over the coming months.

Gunsynd (GUN) had cash of £568,000 out of total net assets of £2.36m at the end of July 2019. Gunsynd did raise £498,000 from a share issue during the period. There was an unrealised loss on investments of £224,000 partly offset by a realised profit of £35,000. There was a £400,000 cash outflow from operations. The stake in Oyster Oil and Gas was valued at £350,000 and Gunsynd has subsequently agreed to sell the shares for a total of £260,000. Production sharing contracts for four blocks in Djibouti are not included in the transaction.

NQ Minerals (NQMI) is expanding the capacity of the Hellyer gold mine in Tasmania. A 100 tonne per hour mining dredge should be operational by the end of the year.

Hydro Hotel, Eastbourne (HYDP) is increasing its interim dividend from 7p a share to 9p a share and this goes ex-dividend on 19 December. The final dividend will be maintained at 14p a share.

Tectonic Gold (TTAU) has sold its stake in Tirupati Graphite for £86,844. The initial investment in 2016 was £40,000.

EPE Special Opportunities Ltd (ESO) had a net asset value of 261.97p a share at the end of November 2019.

The acquisition of Netalogue Technologies (NTLP) has been completed and trading on NEX will end on 10 January.

Jersey-based Zandra Holdings has increased its stake in Formation Group (FRM) from 74.62% to 89.99%.

AIM

Lawyer Gately (GTLY) is acquiring T-three Group, which offers human resources services for £3.4m. Pro forma sales from continuing operations were £4.2m and EBITDA was £700,000 and the deal should be immediately earnings enhancing. This business fits with Kiddy which was acquired last year.

Feed, fuel and food distributor NWF (NWF) has leased another warehouse on the back of a five-year contract with a food customer. This will add 37,000 pallet spaces in Crewe, which will be predominantly used up by this contract. There is a five-year break clause on the lease. There will be £500,000 of start-up costs this year. Two fuel distributors have been acquired for £5m in recent weeks. The contributions from these will offset the additional cost in the year to May 2020. The feed business has grown its volumes and market share. Interim profit should be better than the weak comparisons.

Pelatro (PTRO) has won another contract. This is for providing additional campaign management services to an existing telecoms client. The deal involves monthly revenues with a share of gains. It is worth $1m over three years.

Investment in connected devices technology is starting to pay off for Vianet (VNET) with the revenues and profit of the smart machines division growing strongly. Additional contracts have been won that provide additional business over the next five years. These contracts alone cover 20,000 units. Technology upgrades are helping the smart zones division to retain and generate more revenues from pub clients. The US smart zones business made its maiden profit in the period. The interim dividend is maintained at 1.7p a share.

Versarien (VRS) has enough cash for its current requirements. The graphene products developer had £2.64m in cash at the end of September 2019. There is an invoice discounting facility available to provide additional liquidity. There is £898,000 of borrowings which are being paid back at around £30,000/month. At the current rate of cash outflow, the cash should last around one year, although a company is not going to wait until it runs out to raise more cash. The hard wear components business is generating cash, but the plastics business has been a drain. There are still plenty of opportunities for Versarien, including in China.

Open Orphan (ORPH) is merging with hVIVO (HVO) via an offer for 2.47 shares for each hVIVO share. Both companies are clinical research organisations. There is limited overlap in the services offered.

Integumen (SKIN) has raised £1.37m at 1.5p a share. The company needs additional funds because a potential client is doing due diligence. Revenues are expected to quadruple to £4m in 2020. Capacity at the Labskin laboratory is being increased.

Audio equipment supplier Focusrite (TUNE) is holding a general meeting to increase the amount it is allowed to borrow from up to £15m to up to £60m. Net cash was £14.9m at the end of August 2019, but the company is keen to make acquisitions.

Digital chemistry analysis company Deepmatter (DMTR) says that AstraZeneca has agreed to use its DigitalGlassware technology in Sweden alongside its own automated compound synthesis platform. This is an initial trial to assess how the technologies can work together. Data capture by DigitalGlassware could reduce cost and time, as well as providing improved analysis.

Spitfire Oil Ltd (SRO) had cash of $2.1m at the end of June 2019. Spitfire has relinquished the Salmon Gums lignite licences. It is a shell and has to make an acquisition by 29 February or trading in the shares will be suspended. This seems likely. The there is six months to make an acquisition or lose the AIM quotation.

Coral Products (CRU) has gained approval to offset production from its plastics recycling plant against the plastic packaging waste levy. Production hours have been doubled and the equipment should be run 24 hours a day by the end of April.

FireAngel Safety Technology (FA.) expects to report a loss nearly double its previous expectations at between £2.6m and £2.9m. that is partly down to lower sales from higher margin products. The fire and smoke alarms company could still be profitable in 2020.

Packaging supplier Robinson (RBN) says that 2019 revenues are slightly lower than forecast but pre-tax profit will be better than expected at £2.2m.

Digital services provider The Panoply Holdings (TPX) reported a one-third increase in interim revenues to £13.4m and the public sector is becoming a greater percentage of revenues. The company is on course to move into profit this year. A pre-tax profit of £3m is forecast.

Wind sensor technology developer Windar Photonics (WPHO) is raising £1.41m at 27.5p a share. This follows the trading statement admitting that sales are disappointing.

India-focused online retailer Koov (KOOV) has been placed in administration because a funder failed to come up with the cash it promised.

MAIN MARKET

ASX-listed Adriatic Metals (ADT1) has joined the standard list. Adriatic has projects in Bosnia Herzegovina. The main focus is the Vares project, north of Sarajevo. There is lead, zinc, copper, silver, gold and barite.

Shefa Gems Ltd (SEFA) has announced a maiden resource for the Kishon Mid-Reach project. The contained revenues are $41/tonne, predominantly due to the Carmel Sapphire. The mining cost is estimated at $26/tonne and it could be reduced.

Zenith Energy (ZEN) has decided not to acquire Nordic Petroleum because of high costs. Work on the C-37 well in Azerbaijan should enable production of more than 250 barrels of oil a day.

Hadrian’s Wall Secured Investments Ltd (HWSL) says it should not continue in its current form due to the large discount to NAV. A review could end up with a decision to run down the company. Brett Miller has been appointed to the board. A new NAV figure has been delayed.

Ferro-Alloy Resources (FAR) says that a sharp fall in the vanadium price has hit short-term profitability and cash generation. It remains confident that the operations in southern Kazakhstan are still viable.

Andrew Hore

Andrew Hore Quoted Micro 28 October 2019

NEX EXCHANGE

Ashley House (ASH) is selling its stake in the Morgan Ashley joint venture to its partner for £2m, with £500,000 deferred for 12-months. Delays in the financial closure of projects has led to a shortage of funds at Ashley House and this deal means it does not have to put any more cash into the joint venture. The renewed focus will be modular buildings and the health and wellness buildings sector. Ashley House cannot work in the elderly care housing sector for three years.

Medicinal cannabis company Ananda Developments (ANA) says that 50%-owned DJT Plants has lodged an application to grow >0.2% THC cannabis. Ananda had net assets of £725,000 at the end of July 2019. That included cash of £162,000. In the six months to July 2019, more than two-thirds of expenses related to the licence application to the Home Office.

Clinical support systems supplier DXS International (DXSP) has been awarded a place on the NHS GPIT Futures framework from the beginning of 2020. This replaces the GPSoC2 framework and means that systems and services will be able to be bought centrally rather than with GP funds. DXS is on course to meet approvals for its specific systems and services. Three newly developed products will be placed on the NHS Digital Online buying catalogue.

Equatorial Mining and Exploration (EM.P) is changing its name to Eastinco Mining and consolidating 100 existing shares into one new share. It is also seeking shareholder approval for the ability to issue more shares. The share purchase agreement conditions for the acquisition of Eastinco have been satisfied. Six billion shares (this will be 60 million after consolidation) and £300,000 of nil coupon loan notes June 2025 have been issued. Heavy mining equipment is being transported to the Kuaka project.

Trading in the bonds of Via Developments (VIA1) has been suspended because a new independent non-executive director has yet to be appointed.

Woodford Investment Management has reported that it has cut its stake in proton beam therapy services provider Rutherford Health (RUTH) from 49.28% to 29.78%, but it is not clear who has acquired the shares.

Ace Liberty and Stone (ALSP) has declared an interim dividend of 0.83p a share and that will cost £359,000. The shares go ex-dividend on 7 November.

Panther Minerals (PALM) plans to consolidate 20 existing shares into one new share and shareholders are being asked to vote for the resolution at a general meeting on 14 November. Panther has been granted its first exploration licence in the Northern Territory. The Marrakai project licence is in the Pine Creek Orogen and covers just over 10 km2. There are a series of gold prospects and there has been previous drilling in the area.

AIM

Footwear retailer Shoe Zone (SHOE) has reassured investors that it will be able to achieve the downgraded pre-tax profit of £9.5m. Net cash of £11.3m at the end of September 2019 is better than expected.

Monoclonal antibodies developer Bioventix (BVXP) reported a 6% increase in full year revenues, although the underlying growth was 16% due to the inclusion of back dated royalties in the previous year. Underlying pre-tax profit was 14% ahead at £7.1m. A 47p a share special dividend is proposed on top of the final dividend of 43p a share. Vitamin D antibody sales increased by one-quarter and they account for 46% of group revenues.

D4T4 Solutions (D4T4) says that its first half trading was in line with expectations. Interim revenues of the data analytics and collection company were £8.8m and this should be one-third of the full year total.

Oil and gas producer President Energy (PPC) is acquiring additional acreage in Rio Negro province from the Argentine oil company CGC in return for assuming the liabilities related to the acreage. CGC is also subscribing for $1.825m worth of shares in instalments. The first instalment of $500,000 will be subscribed when the acquisition is completed. The total subscription could be the equivalent of 3% of President, depending on the share prices when the money is invested.

Thor Mining (THR) is raising £510,000 at 0.2p a share. The cash will be invested in the Molyhil and Bonya tungsten and molybdenum projects in the Northern Territory and a copper project in South Australia.

Vianet (VNET) says that its smart machines division is adding to its customer base and the contracts won in August mean that the growth will continue. Overall trading in the first half was in line with expectations.

MAIN MARKET

TNG (TNG) is seeking to join the standard list. The titanium dioxide project owner already has an ASX listing. TNG owns the TIVAN process that enables production of ultra-white titanium dioxide pigment. The Munt Peake project in Australia will be the first to use the technology. The project will also produce vanadium. A final investment decision will be made as early as next summer.

Fasteners supplier Trifast (TRI) has been hit by weakness in its main markets. There have been reduced volumes in the automotive market. The forecast pre-tax profit for the year to March 2019 has been cut from £22m to £20.3m.

Zenith Energy (ZEN) has raised £824,000 at around 3p a share from the placing in Norway.

Standard list shell Rockpool Acquisitions (ROC) has signed heads of terms with a company in Nevada, which will subscribe for £1.6m of shares and convertibles at an issue/conversion price of 12p a share. Rockpool will make a further loan of £750,000 to Greenview Gas, taking the total to £910,000, which will be convertible into 40% of Greenview.

J Smart and Co (Contractors) (SMJ) increased full year revenues from £8.56m to £16m. The pre-tax profit improved from £5.82m to £7.27m, although that was mainly due to the net surplus on property valuations rising from £2.86m to £4.05m. A lull in contracting work means that this year’s profit is unlikely to improve.

Cash shell Baskerville Capital (BASK) still had £1.5m in the bank at the end of June 2019.

Andrew Hore

Andrew Hore – Quoted Micro 10 June 2019

NEX EXCHANGE

Proton Partners International Ltd (PPI) has asked Woodford Investment Management to subscribe for £25m worth of shares at 176p a share. This is part of an agreement with Woodford that was outlined in the prospectus and it comes at a time when the fund manager is coming under pressure for poor performance and it has closed redemptions from one of its funds. The cash will pay off a loan and provide working capital.

NQ Minerals (NQMI) is making a £155,000 investment in Tasmania Energy Metals and the two companies will evaluate whether they should develop an integrated facility for the treatment of metal concentrate. NQ also has an exclusivity period until the end of July during which to decide whether to acquire Tasmania’s assets.

Sativa Investments (SATI) has signed an offtake agreement with a Swiss supplier of cannabis oil. This will be used to manufacture cannabidiol products.

AfriAg Global (AFRI) has invested £300,000 in Apollon Formularies for a 0.71% stake. Apollon plans to open a licenced retail medicinal cannabis dispensary and processing facility in Jamaica by the end of the month.

Newbury Racecourse (NYR) says that it is unlikely to return to paying dividends or return capital to shareholders before 2022 at the earliest. There is uncertainty about future revenue streams from fixed-odds betting terminals and how this could impact UK betting. It could reduce prize money levels. The onsite hotel has increased revenues by 15% so far this year.

Trading in shares of Equatorial Mining (EM.P) has been suspended ahead of publishing accounts. They should be published at the time of the general meeting to gain approval of the acquisition of Rwanda-based miner and explorer Eastinco. A £1.2m fundraising is also planned.

Altona Energy (ANR) has signed a memorandum of understanding with Shaanxi Qianyan Vanadium and Magnesium Mining, which owns a vanadium mine in China. The plan is to forma joint venture where Altona will be the controlling shareholder. Due diligence will take up to six months and there will be a JORC-compliant mineral resource classification report. The estimated reserve is 190,000 tonnes of vanadium.

Formation Group (FRM) has secured a £10m subscription at 7.71p a share through the acquisition of Zandra Holdings, whose asset is £10m in cash. This takes the Kennedy Private Trust stake in Formation to 89.99%. A £10m loan facility ahs also been secured.

The Little Bear mine area has been transferred to Panther Metals (PALM) and the Little Bear vein is a high priority drill target in order to see if the bonanza grade gold mineralisation still exists at depth. Panther has also applied for a licence over the Annaburroo gold project in Northern Territory, Australia.

Walls and Futures REIT (WAFR) has secured a £600,000 secured revolving credit facility and spent £465,000 on a bungalow in Didcot to be redeveloped into a home providing specialist support for four adults.

Valiant Investments (VALP) is raising £263,000 at 1.5p a share and it is changing its name to Eurocann International as an indication of the change in strategy to investment in the medicinal cannabis sector. Jeremy Rose will become chief executive and he has a number of directorships including of Speakeasy Cannabis.  Burns Singh Tennent-Bhohi will become a non-executive.

EcoVista (EVTP) had £419,000 in cash at the end of February 2019 and it is seeking further investment. The interim loss declined from £238,000 to £202,000. Net assets were £1.19m at the end of February 2019.

Share trading in Wishbone Gold (WSBN) has been suspended because it has not published its 2018 accounts.

AIM  

The smart machines division of Vianet (VNET) is going to be the source of profit growth for the coming years. Profit can be improved by converting the vending machines that came with the Vendman acquisition to Vianet’s contactless technology, as well as winning new business. The smart zones pub dispensing technology division should be able to maintain its contribution with lower UK profit due to pub closures being offset by an improved performance in the US. Pre-tax profit is expected to improve from £2.7m to £2.9m, although earnings per share will be hit by a higher tax charge.

Interim revenues at smart home devices supplier LightwaveRF (LWRF) increased 120% to £2.5m, although there was still a pre-tax loss of £1.35m.  New distribution channels are helping to accelerate growth in revenues. The company could move into profit next year

Bad weather in the US has hampered the progress of Somero Enterprises (SOM) and led to forecast downgrades. Demand for concrete levelling equipment is normally stronger in the spring. This year’s earnings have been cut by 12% and next year by 11%. This will also reduce the potential dividend. The forecast 2019 normal dividend plus payout of surplus cash has been cut from 27.8 cents a share to 19.8 cents a share.

Waste-to-energy technology developer EQTEC (EQT) is acquiring a 19.99% stake in North Fork Community Power, a biomass gasification power project in California. EQTEC will supply $2.5m worth of equipment from its Newry site in return for the stake. It also expects to generate €2.2m from selling additional equipment.

Microsaic Systems (MSYS) has signed a distribution agreement for the Microsaic 4500 MID MS detector with CM Corporation for the South Korean market.

A shareholder owning a 17.2% stake in Rurelec (RUR) intends to propose an AGM resolution for the appointment of Gordon Fisher as a director. He is a former boss of a freight forwarding and customs brokerage. The electricity generator reduced its pre-tax loss from £5.8m to £600,000 in 2018, mainly due to lower overheads, exchange gains and a disposal gain. NAV is 4.4p a share, which is more than four times the share price.

Driver (DRV) had already said that its interims would be disappointing and pre-tax profit slumped from £2.11m to £762,000. The Middle East and Asia Pacific were tough markets with lower contributions. The expert witness operations made a reduced contribution. A 0.5p a share interim dividend was announced, and the ex-dividend date is 19 September. The company is also buying back shares in order to put a floor under the share price.

Chemicals-focused shell Wilmcote Holdings (WCH) is in exclusive discussions with Arclin Inc for a potential acquisition. Trading in the shares has been suspended.

Acquisitions consultancy K3 Capital (K3C) has confirmed that trading is in line with previous guidance and EBITDA is at the upper end of the range of £4.5m to £5m. An 80% payout would mean a reduction in dividend from 11.2p a share to 7.2p a share.

Osirium Technologies (OSI) has won a contract with a European telecoms services provider. The three year contract covers cyber security software and services.

MAIN MARKET 

A strong first half has continued into the second half trading for automotive information publisher Haynes Publishing (HYNS) and pre-tax profit for the year to May 2019 is expected to exceed expectations by 10%. This suggests pre-tax profit of around £2m. The results will be announced on 12 September.

Caffyns (CFYN) reported a small improvement in underlying pre-tax profit to £1.45m in the year to March 2019. New car sales were 10% lower, which is more than three times the market decline. However, there was growth in used car sales and aftersales revenues.

Positive news from Argo Blockchain (ARB) where results for May were well ahead of the company’s budgets. New cryptomining hardware has started contributing faster than expected and rising cryptocurrency prices have improved mining yields. A further £2.85m is being invested in equipment. There was £685,000 generated in May, based on a bitcoin price of $8,575, while cash operating costs were £280,000. Second quarter figures will be better than expected. If the bitcoin price is maintained, then there will be £2.85m of crypto assets at the end of the second quarter.

BigDish (DISH) has raised £2.1m at 7.2p a share and this should be enough cash for the restaurant platform until 2021. The UK rollout will be accelerated.

Pembridge Resources (PERE) is acquiring the Minto mine from Capstone Mining. Pembridge will pay up to $20m out of future cash flows. Commercial production could recommence before the end of the year. A $10m loan has been secured.

Symphony International Holdings (SIHL) has made an investment in Soothe Healthcare, which manufactures feminine hygiene products under the Paree and Pariz brands.

Andrew Hore

Andrew Hore – Quoted Micro 10 December 2018

NEX EXCHANGE        

TechFinancials Inc (TECH) is developing a blockchain-based sports ticketing business with Footies Tech Ltd. The new company will licence blockchain technology from TechFinancials, which will have a 75% stake in the company. TechFinancials will provide up to $500,000 to the company and this commitment is dependent on a client signing up within three months. The idea is to make the sports club take control of the initial sale and any secondary ticket transactions. Former Liverpool FC chairman Ian Ayre will be chairman of the new company.

Eight Capital Partners (ECP) has invested £60,000 in Pelican House (PHM) at 0.45p a share. Eight Capital will be issued 13.33 million warrants exercisable at 0.45p a share. Eight Capital is appointing John Treacy to the board of Pelican, which is changing its investment strategy from natural resources to sports and leisure.

Crossword Cybersecurity (CCS) has raised £2m at 290p a share and it will move to AIM on 14 December. The share price peaked at 430p in March. Crossword is valued at £13.6m at the placing price. Hargreave Hale AIM VCT has taken a 7.37% stake.

Early Equity (EEQP) is assessing additional investments that fit its strategy. There was £437,000 of cash in the balance sheet at the end of August 2018. The main investment is a 47.1% stake in healthcare products distributor Yicom Global.

Miton has increased its stake in Wheelsure Holdings (WHLP) from 15.5% to 17.8%. DXS International (DXSP) chief executive David Immelman has bought 20,002 shares at 9.9p each, taking his stake to 10.45%.

Welney (WENP) is considering a couple of proposals that can enable the company to move ahead. The loan note holders have agreed not to call in the loans for at least another 12 months. Net liabilities were £268,000 at the end of June 2018.

Block Commodities (BLCC) has launched the Farmer 3.0 (described as an integrated agri-business ecosystem) pilot project, which covers up to 1,000 Ugandan farmers. The plan is to expand the service to up 50,000 farmers.

AIM  

Plastics Capital (PLA) has still to see the benefits of its investment in capacity and winning new business. In the six months to September 2018, revenues improved 11% to £40.6m and underlying pre-tax profit recovered from £1.2m to £2.1m. Net debt was £15.7m at the end of September 2018 to £14.5m by March 2019. Cenkos forecasts a 2018-19 profit of £5m, rising to £5.4m next year.

Broker finnCap (FCAP) joined AIM and completed the acquisition of Cavendish Corporate Finance last week. finnCap raised £3.75m at 28p a share.

The People’s Operator (TPOP) has the chance to receive an investment from the owner of LycaMobile. A share capital reorganisation is required before any shares can be issued. Every 2,000 shares will be consolidated into one share. An investment of £1.3m will be in shares (29.9%) and convertible loan notes – convertible at 10p a share.

Evgen Pharam (EVG) says that the final patient in the STEM:SFX-01 trial for metastatic breast cancer will take her last dose by the end of 2018. The final readout for the trial should be in March.

Ceres Power (CWR) has finalised its collaboration with Weichai Power. They will create a fuel cell manufacturing joint venture in China and technology will be licenced to the new venture, which could generate up to £30m in payments. There is also a £9m joint development agreement for range extenders for electric buses. Weichai will invest £28m at 164.5p a share.

Hagai Tal has resigned as chief executive of Taptica International Ltd (TAP) after he was criticised about his actions at a previous company. Rivi Bloch takes over as interim chief executive. The business appears to be changing with revenues not up to expectations but margins improving.

Panther Securities (PNS) is paying a special dividend of 15p a share after what it calls the best year it has experienced. Next year at least 12p a share will be paid.

Woodford has says that it will subscribe £8m in a fundraising for eve Sleep (EVE) and Channel 4 says that it will invest £900,000. Chairman Paul Pindar will invest £1m. Discussions continue with other investors in order to raise the £15m required.

Vianet (VNET) is growing its smart machines operations and it was responsible for the growth in revenues in the first half. The pubs market remains tough and smart zones revenues dipped, but there is the prospect of a large order in the US. Full year profit is expected to improve from £2.7m to £3m. The interim dividend is maintained and the total dividend for the year should be unchanged at 5.7p a share.

Versarien (VRS) has signed a supply agreement to supply a new graphene enhanced polymer range to AECOM. Interim revenues were 19% higher at £5.22m. There was cash of £6.07m at the end of September 2018. There was a £1.1m cash outflow in the six month period.

Omega Diagnostics (ODX) continues to lose money and net debt was £700,000 at the end of September 2018. The £2m overdraft facility should provide enough finance for the company’s needs. The commercialisation of Visitect CD4 is important to long-term progress for the company. CE marking for advance disease should be awarded soon. The timing of approvals and therefore revenues is difficult to predict.

Pebble Beach Systems (PEB) has resolved its dispute with xG Technology Inc over the disposal of its hardware business. No further liabilities are due by either party and the forecast cash balances for Pebble Beach will not be materially different.

Rose Petroleum (ROSE) has agreed an operational plan with the Utah authorities for its acreage in the Paradox Basin and this includes recently acquired acreage. A suitable drilling rig should be available in the first quarter of 2019. The plan is to secure funding for the drilling programme.

Zinc Media Group (ZIN) has appointed Mark Browning, who is currently boss of ITN Productions, as chief executive and he will start in the first half of 2019. He replaces former finance director David Galan, who became full-time chief executive in February.

Adam Formela has stepped down as chief executive of packaging manufacturer Robinson (RBN). Martin McGee has become interim chief executive.

Trading in the shares of MySQUAR (MYSQ) will end on 10 December. Additional cash is required and a sale of assets to a NEX-quoted company in return for shares could happen. The investigation of past financial transactions continues.

Fishing tackle retailer Fishing Republic (FISH) has appointed administrators.

MAIN MARKET   

Cryptocurrency mining services provider Argo Blockchain (ARB) estimates that its current annualised revenues are $6.2m (£4.8m). Trading is ahead of expectations. Net cash was £15m at the end of November 2018.

Sand U (SUS) says trading is in line with expectations. There has been a reduction in demand for finance for used cars. This means that the loan portfolio is growing more slowly than expected.

Standard list shell Spinnaker Opportunities (SOP) is evaluating opportunities in the cannabis market.

Andrew Hore

Andrew Hore – Quoted Micro 11 June 2018

NEX EXCHANGE   

There are eight companies in the running for the NEX Exchange company of the year at the Small Cap Awards. The awards will be held at The Montcalm Hotel, Marble Arch.

Kent-based wines maker Chapel Down Group (CDGP) has built up a significant presence in the English wines market. The company has a winery in Tenterden and it is building a new brewery for its beer operations. Chapel Down reported a 15% increase in annual sales to £11.8m. Wine sales were one-fifth higher at £8.12m with cider and beer sales, via associate Curious Drinks, were 7% ahead at £3.68m. Operating profit improved from £346,000 to £470,000 but there was a much larger loss from the Curious Drinks associate so pre-tax profit was lower. The new brewery should be open in the first quarter of 2019.

Cyber security technology developer Crossword Cybersecurity (CCS) is still at a very early stage of its development but it more than doubled its revenues in 2017. The loss still increased from £950,000 to £1.24m despite the improvement in revenues from £345,000 to £737,000. The cash outflow was £1.06m, which left £490,000 in the bank. Since then, £2.16m was raised via a placing at 270p a share. Crossword has interests in a number of early stage businesses, including CyberOwl, a joint venture between Coventry University and Crossword, which has backing from Mercia Fund Management. CyberOwl is developing network security software for target-centric monitoring.

Field Systems Designs Holdings (FSD) has one of the longest track records on NEX and it has its highest share price in more than one decade of trading. Field Systems designs, installs and supplies electrical, instrumentation and control systems, for the water, power and transport sectors. In the six months to November 2017, revenues jumped from £8.47m to £12m, while pre-tax profit improved from £114,000 to £211,000. There was £3.34m of cash in the bank and NAV was £3.31m, which is more than the market capitalisation.

KR1 (KR1) has had a successful year buying and trading various coins and tokens. The KR1 share price has more than quadrupled over the past year. KR1 generated gains of £4.3m on its trading in digital coins and tokens during 2017. There was also a total unrealised gain of £10.8m on these investments and a £1.18m foreign exchange gain. The total pre-tax profit was £14.5m, with a tax charge of £2.87m.

Dairy and livestock services provider National Milk Records (NMR) was originally part of the Milk Marketing Board and after it was spun off it joined the forerunner of NEX. National Milk Records generated revenues of £5.32m in the three months to March 2018. This means that revenues are £1.51m ahead so far this year, although the comparatives are weak. Herdwise, the screening service for Johne’s disease and other testing services are providing growth with a small improvement from milk recording services. Rising milk supply has started to hold back milk prices.

Energy saving electrical products supplier Sandal (SAND) reported flat interim revenues of £1.88m but it masks the growth in the sales of MiHome products. This growth will continue in the second half. The interim pre-tax profit edged up from £35,000 to £44,000. Sandal secured a term loan of up to £500,000 from major shareholder Greenbrook Industries Ltd and £250,000 was used to buy back 862,068 shares from Greenbrook. The shares were cancelled and this will enhance earnings per share.

Daniel Thwaites (THW) is a brewer, hotels and pubs operator that has been trading for more than two centuries. It has also been on NEX for more than two decades, since the London Stock Exchange closed rule 4.2, which was a matched bargains facility for unquoted companies. Some of these former rule 4.2 companies moved to AIM, while others, including a number of regional brewers, moved to Ofex/NEX. In the six months to September 2017, revenues improved from £44m to £48m and underlying pre-tax profit were flat at £5.9m. The shares are trading at a near-50% discount to NAV.

Walls & Futures REIT (WAFR) is an ethical housing REIT and it is also on the shortlist for the impact company of the year. The company develops new housing for people with learning and physical disabilities or needing extra care. Earlier this year, Walls and Futures raised £80,000 from an open offer at 94p a share. In 2017, Walls and Futures achieved a total return on its portfolio of 11.5%, ahead of its benchmark total return of 7%. Walls and Futures has joined the MSCI IPD UK Residential Property Index.

The winner will be announced on Thursday 14 June.

Cannabis investment company Sativa Investments (SATI) is widening its remit. It is asking shareholders to agree to investments outside of Canada.

Ace Liberty and Stone (ALSP) has completed the acquisition of offices in Leicester for £4.385m. The Leicester Crown Prosecution Service pays an annual rent of £290,000.

St Mark Homes (SMAP) is paying a maintained interim dividend of 5.5p a share and the ex-dividend date is 5 July. The dividend will cost £247,000. The carbon emissions trading business has also started electronic currency mining.

China CDM Exchange Centre Ltd (CCEP) reported a small dip in revenues from £898,000 to £888,000 but it managed to increase its profit from £2,000 to £35,000.

Karoo Energy (KEP) has secured Contax Partners as technical partner and project manager for the shale gas project in Botswana. Contax will accept £800,000 worth of shares in Karoo as payment for services. Karoo hopes to apply for admission to AIM by 1 July.

Wishbone Gold (WSBN) says full production at its Honduras processing plant has been delayed because permits have not been received for the processing of larger amounts of gold ore.

EPE Special Opportunities (EL.P) had an NAV of 228.16p a share at the end of May 2018.

AIM   

Property investment adviser First Property Group (FPO) reported flat pre-tax profit of £9.23m in the year to March 2018. The final dividend is 3% higher at 1.18p a share. The underlying NAV rose from 47.6p a share to 53.1p a share. Third party assets under management were 45% higher at £454m, which is mainly down to the new office fund. Progress this year will be held back by the departure of the tenant in a building in Poland. Some of the space has already been re-let and the rest should be during the year.

Pawnbroker Ramsdens (RFX) continues to grow on the back of strong foreign exchange revenues. Last year, they were 26% higher at £11.3m. Group revenues were 16% ahead at £39.9m, while underlying pre-tax profit rose 60% to £6.5m. Net cash was £12.7m, although that does include foreign currency stocks. The total dividend was 6.6p a share.

Gooch and Housego (GHH) increased interim revenues by 7% to £55.6m and underlying pre-tax profit was13% ahead at £7m. Aerospace was the main growth area as subsea telecoms demand was weak. The photonics and optical equipment company is on course for a full year profit of £18.5m.

Artilium (ARTA) is recommending a cash and shares bid from Pareteum. The offer is 0.1016 of a Pareteum share and 1.9p in cash for each Artilium share, which values the telecoms software supplier at £78m. The offer follows a strategic alliance between the two companies that was announced last year.

IT managed services provider Redcentric (RCN) says that some public sector contracts have been cancelled and there will be upfront costs for a new contract with the NHS in Yorkshire. That means that 2018-19 EBITDA will be 10% lower than previously forecast.

Imaginatik (IMTK) has completed its strategic review and the chairman and chief executive are both leaving and they are waiving compensation. This will help to reduce annual costs by £750,000. The business is no longer up for sale because no suitable bid was received. Annualised revenues are £2.8m and the innovation software business could move into profit after a full year’s benefit of the cost savings. Former chairman Matt Cooper has sold £225,000 worth of shares at 0.5p each and reinvested the cash in a new £225,000 convertible, interest free loan note. Octopus has reduced its stake from 27.2% to 7.1%.

Mass spectrometry instruments supplier Microsaic Systems (MSYS) has raised £5.5m at 2p a share and an additional £102,000 via a PrimaryBid.com offer.

Trading in cash shell Monreal (MORE) has been suspended because the former Cogenpower has not completed a deal. The board is asking for shareholder approval to move to NEX after the AIM quotation is cancelled on 3 July. The investment strategy will focus on technology, media and telecoms.

Education-focused virtual reality content supplier VR Education (VRE) has delayed the full launch of the latest version of its Titanic VR product until August but it is not expected to affect full year expectations. Work has started with the BBC on 1943: Berlin Blitz.

Driver Group (DRV) continues to improve its margins and profit helped by the growth of the Diales expert witness business. Middle East revenues were lower but profit was higher, while high utilisation rates in Asia Pacific meant that was a sharp swing back to profit in the region. Underlying pre-tax interim profit doubled to £2.1m om the six months to March 2018 and Driver ended the period with net cash of £800,000. The sale and leaseback of the company’s head office was completed in April and net cash is forecast at £5.5m for the end of September 2018. A full year profit of £3.5m, up from £2.5m, is forecast. A return to dividend payments is a possibility in the next year or so.

Rose Petroleum (ROSE) has enough cash to push forward with the exploration of its Paradox basin acreage in the US. Rose is still earning its 75% working interest in the acreage and it has already received interest from potential farm-in partners that could help finance the first well, which could cost $7m-$8m. A competent person’s report will provide an updated resource in the next few weeks.

The smart machines division was behind the small improvement in profit at Vianet (VNET) in the year to March 2018. That was helped by a contribution from the Vendman acquisition. The smart zones drinks dispensing technology made a slightly lower contribution to profit as it lost more pub customers but the US side is making progress. Research and development spending on technology peaked at £1.5m last year and should fall this year. Net cash fell to £1.27m because of the extra spending but the dividend was maintained at 5.7p a share. The investment should start to pay off this year and pre-tax profit is expected to rise from £2.7m to £3m.

MAIN MARKET    

LED lighting supplier Luceco (LUCE) is closing its loss-making US business at a cost of £2m. The US business lost £1.9m last year. Luceco announced an operating profit of £14.2m in 2017.

Quarto Group Inc (QRT) has appointed former finance director Mick Mousley as interim finance director following the departure of Carolyn Bresh. This follows the change of control at the AGM.

Lb-shell (LBP) is asking for shareholder approval for the creation of £435,000 of unsecured convertible loan notes with a conversion price of 0.025p a share. That requires the par value to be reduced to 0.025p a share. Full conversion could mean the issue of shares equivalent to 89.4%. Three directors will own a total of £290,000 of the loan notes. The former Intelligent Energy will offer shareholders the chance to sell their shares for 0.025p each.

Andrew Hore

Andrew Hore – Quoted Micro 11 December 2017

NEX EXCHANGE

First Sentinel (FSEN) has bought a 80% stake in Perennial Enterprises in Australia in an all share deal. Perennial is a profitable debtor finance business and it is purchasing A$5m of invoices each month. Shane Perry of Perennial will join the First Sentinel board.

Primorus Investments (PRIM) has sold its investment in Gold Mines of Wales to Alba Mineral Resources (ALBA) in return for 83.3 million shares in Alba (3.6% of the company). That was worth £317,000 at an Alba share price of 0.38p.

NHS-focused software systems supplier DXS International (DXSP) has been hit by budget cuts but management is hopeful that NHS restructuring will have a positive effect. A tender has been won for a pilot of a new product range. The NHS will launch the GPSOC3 tendering in 2018 and this could provide opportunities for DXS.

Block Energy (BLOK) has delayed its move to AIM until mid-January. It was originally expected to make the move on 7 December.

Etaireia Investments (ETIP) had net assets of £1.88m at the end of September 2017. Since then, two buildings in Peterlee have been acquired and more acquisitions are promised in the near future.

Early Equity (EEQP) impaired two investments in the year to August 2017. The full year loss was £139,000. Further cash has been raised since the year end.

Commercial property investor Ace Liberty and Stone (ALSP) has completed the purchase of the New Majestic Bingo Hall, Middlesbrough for £4.15m and it generates rent of £313,000 a year.

All Star Minerals (ASMO) has raised £30,000 at 0.075p a share.

AIM

Sula Iron and Gold (SULA) is acquiring a controlling interest in a cobalt licence in the Democratic Republic of the Congo (DRC) for $100,000. This is near to existing cobalt and copper mines. A holding company will be 70% owned by Sula and 30% owned by the vendor. A placing is raising £1.75m at 0.05p a share. This will provide cash for the exploration of the new licence and finance the development of the assets in Sierra Leone. Sula will assess other opportunities in the DRC. The Riverfort facility will be terminated and shares bought back from D-Beta. The company is changing its name to African Battery Materials.

Evgen Pharma (EVG) has raised the cash to finance the completion of the phase II studies for SFX-01, which uses its synthetic sulforaphane called Sulforadex. There is a phase II trial assessing the treatment of metastatic breast cancer and there should be an interim reading in the first half of 2018 and it will report fully before the end of the year. There is also a phase II trial for subarachnoid haemorrhage stroke, which should also report by the end of 2018. Evgen has raised £2.3m at 12p a share. Hardman says that cash burn is £300,000 a month.

Mirriad Advertising (MIRI) has reset its flotation date to 19 December and it is raising £25.4m, before costs of £1.2m, at 62p a share. Numis is nominated adviser and broker, while Baden Hill is joint bookrunner. Mirriad, which has developed technology to enable product placement in existing TV and film content, will be valued at £63.2m. Management is raising £800,000 from the sale of existing shares. IP Group is a major shareholder and is investing a further £3.7m, leaving it with a 27.2% stake. Amati VCT, Amati VCT 2, Edge Performance VCT and Oxford Technology 4 VCT, which acquired its shareholding around a decade ago, also have stakes, although it does not appear that the VCTs will generate much of an increase in the value of their holdings at the placing price.

Brighton Pier Group (PIER) has agreed to buy mini golf site operator Paradise Island Adventure Golf for an initial £10.5m. The business made an EBITDA of £1.21m on revenues of £3.49m in the most recent financial year. Six sites are being operated with two to be added. This is less seasonal than Brighton Pier. A placing raised £3m at 95p a share, with executive chairman Luke Johnson investing £850,000.

Delays with a project at Hinckley C hampered last year’s figures from Redhall (RHL) but the underlying business has been put on a much firmer footing. The order book is higher and so are the gross margins on the work.

Collagen Solutions (COS) has been hit by a delayed order from a major tissue customer which is launching a new product incorporating the tissue. This will hamper full year revenues. Interim revenues were flat at £1.86m and the full year revenues are expected to still rise from £3.95m to £4.31m but this is around £800,000 lower than previous forecasts. There should still be £6m in the bank at the end of March 2018. The long-term prospects for the ChondroMimetic cartilage repair product are positive.

Vianet Group (VNET) is switching its revenue model for its smart machines division to focus increasingly on regular recurring revenues from contactless payment technology sales. This held back interim revenues. Since the end of the first half, Vianet has completed the acquisition of Vendman and this should make a small profit contribution in the second half. Full year group revenues are expected to rise from £14.3m to £15.4m, while pre-tax profit should move from £2.5m to £2.8m. Vianet is changing its sector to telecommunication equipment.

Accounting software supplier FreeAgent Holdings (FREE) grew its interim revenues by 28% to £4.6m without any significant contribution from its partnership with Royal Bank of Scotland. Growth was slowed by regulation changes relating to public sector contractors. The policy of moving towards digital tax returns will provide a future boost to demand for the company’s software from small businesses. House broker N+1 Singer has trimmed its forecast revenues for the next two years and does not expect FreeAgent to make a full year pre-tax profit over that time scale.

Sovereign Mines of Africa (SMA) ran into regulatory and tax issues relating to its proposed reverse takeover of an Indian eyewear manufacturer. Trading in the shares was suspended on 21 July so it has until 27 January to find a potential acquisition.

Pennant International (PEN) is partnering with Capewell Aerial Systems, a producer of military and law enforcement equipment. The two companies will develop opportunities and an initial product is already under development. The news that BAE is selling Typhoon aircraft to Qatar is also good for Pennant.

Wind measurement technology developer Windar Photonics (WPHO) has received an order for 300 WindEYE LiDAR systems from a Chinese distributor. There will be 50 delivered this year and the rest in the first half of 2018.

Software supplier Pelatro plans to join AIM on 19 December. The mViva software is developed in India and used for marketing by telecommunications companies.

Video games developer Sumo Group plans to float by the end of December. Video games industry veteran Ian Livingstone is a non-executive director.

MAIN MARKET

Hemogenyx Pharmaceuticals (HEMO) has made good progress since it reversed into a standard list shell. Hemogenyx continues to work with contract research organisation LakePharma Inc, whose holding company invested £350,000 in Hemogenyx, to develop its therapies for bone marrow or blood stem cell transplants. This collaboration should help to progress the CDX technology towards clinical studies in 16 months time and preparatory work has started on a submission to the US FDA. The company has recently announced a collaboration with Oxford University that could generate work that will significantly improve the efficiency and safety of bone marrow transplants. A reliable supply of human tissue has been secured from a US research university.

Rainbow Rare Earths (RBW) has shipped the first load of rare earth mineral concentrate and it is currently on the road Mombasa. Production has commenced on time and within budget. Gasagwe is the only producing rare earths mine in Africa. Arden believes that Rainbow could make a profit of $3.4m in the year to June 2018, rising to $4.2m in 2018-19.

Deloitte has been appointed as administrator to Torotrak (TRK) because of a shortage of cash. Trading in the shares has been suspended.

Andrew Hore

Quoted Micro 12 June 2017

NEX EXCHANGE

Brewer and pubs operator Daniel Thwaites (THW) says that net debt has increased from £34.1m to £47.6m at the end of March 2017 because of investment in the brewery and pubs plus acquisitions. The benefits of this investment is starting to show through. Full year revenues from continuing operations were slightly lower at £84.4m, while operating profit improved from £11.5m to £12.1m. The total dividend is unchanged at 4.46p a share.

Churchill Mining (GHL) has switched from AIM to NEX although trading in the shares remains suspended. Churchill’s main focus is the international arbitration claim against the Indonesian government.

Good Energy (GOOD) received applications for more than £10m of the corporate bonds on offer. The energy supplier has closed the online offer but postal applications close on 12 June – assuming the maximum application level of £20m has not been reached before this.

Coinsilium Group Ltd (COIN) has invested £56,000 in Singapore-based Indorse Pte Ltd, which is developing Indorse, a blockchain-powered professional social network. Coinsilium will also receive a number of Indorse digital tokens in the next few months.

China CDM Exchange Centre Ltd (CCEP) reported a decline in full year revenues from £1m to £898,000. Pre-tax profit fell by two-thirds to just over £2,000. There is £2.3m in the bank and the NAV was £52.1m at the end of 2016. The company is investing in blockchain technology as part of its growth strategy.

Asia Wealth Group Holdings Ltd (AWLP) says that the 45,000 shares it owns in Ray Alliance Financial Advisers have been transferred to the other two Ray Alliance shareholders without any authorisation. Asia Wealth paid $318,000 for the shares back in 2012. Asia Wealth has demanded that the shares are transferred back.

Valiant Investments (VALP) has raised £45,000 at 0.1p a share. The cash will provide working capital and provide the ability to invest more in apps business Flamethrower.

AIM

DX Group (DX.) has renegotiated the terms of the merger with Menzies Distribution which involves the payment of £40m in cash and shares equivalent to 65% of the enlarged share capital – this includes a 5% stake that will be held by the John Menzies pension fund. DX will still have to take on 17% of the pension fund. Cost savings of £10m a year are expected and a dividend is promised. Rebel shareholder Gatemore is backing the revised transaction. Things are still not running smoothly, though. The City of London police is investigating an allegation concerning DX.

MP Evans (MPE) harvested 180,000 tonnes of oil palm fruit bunches in the first five months of 2017, which is one-quarter higher than in the same period of 2016. This is due to a mixture of improving weather conditions and maturing plants. In the same period, palm oil production increased from 37,900 tonnes to 60.100 tonnes. The average selling price has increased by $51/tonne to $606/tonne, while palm kernel prices moved from $414/tonne to $503/tonne. There could be some downward pressure on prices in the second half.

Somero Enterprises Inc (SOM) has announced a special dividend of 13.3 cents a share on top of the normal dividend. This will cost $7.5m and leave the construction equipment company with much more than $10m in the bank even before allowing for cash generated so far this year. Shareholders on the register on 28 July will receive the dividend. Trading in Europe has been strong and the only disappointment has been North America where business has been delayed.

Best of the Best (BOTB) is also paying a special dividend out of its cash pile. Full year revenues grew 7% to £10.8m, while pre-tax profit improved from £1.1m to £1.5m. A normal dividend of 1.4p a share will be paid plus an additional 6.5p a share as a special dividend. There are also plans for the competitions organiser to increase marketing spending.

Waste to energy systems developer PowerHouse Energy Group (PHE) has secured a collaboration agreement with a UK partner that will provide two tranches of funding for the demonstration unit and five systems. The total funding will be up to £500,000.

DP Poland (DPP) has raised £5.25m at 43p a share. The cash will help finance 15 new Domino Pizza stores in Poland this year and finance loans for sub-franchise store openings in 2019.

Trading in Savannah Petroleum (SAVP) shares has been suspended following an exclusive agreement to buy the oil and gas assets of a west Africa-focused company. The structure of the transaction has been agreed in outline and it will involve debt, shares and cash. Due diligence has been going on since January. The shares will remain suspended until a document is published for the reverse takeover.

Nostra Terra Oil & Gas (NTOG) says that the general meeting requisition at US-focused oil and gas company Magnolia Petroleum (MAGP) is by former chief executive and founder Steven Snead using the shares that Nostra Terra has agreed to purchase. The proposals include the removal of chief executive Rita Whittington and the appointment the Magnolia board of Ewen Ainsworth, chairman of Nostra Terra, and Donald Phillips.

Vianet Group (VNET) has restructured its business into two divisions: smart zones and smart machines. Smart zones is based on the fluid measurement and telemetry business with pubs. The US business is moving towards breakeven. The smart machines division is focused on vending machines and there is a significant addressable market. There was a dip in underlying pre-tax profit form £2.8m to £2.6m last year, with a small improvement forecast for this year. The dividend is set to continue to be unchanged at 5.7p a share.

LiDCO (LID) has received 510k clearance from the FDA for the LiDCO Unity version 2. This will enable LiDCO to offer a high usage programme for a fixed annual licence fee. The head of US operations is already in place and ready to push ahead with the strategy. LiDCO is expected to move into profit in the year to January 2019.

Shareholders are trying to requisition a general meeting at Irish gold explorer Conroy Gold and Natural Resources (CGNR) in order to remove six directors. Seamus FitzPatrick, James Jones, Dr Sorca Conroy, Louis Maguire, Michael Power and David Wathen are the directors that the requistioners wants removed and replace them with Patrick O’Sullivan, Paul Johnson and Gervaise Heddle. The three directors not affected by the requisition are Professor Richard Conroy, Maureen Jones and Professor Garth Earls.

Disruptive Capital has made a bid approach to Stanley Gibbons (SGI).

MAIN MARKET

Telecoms services provider Toople (TOOP) raised £1.41m, before expenses of £150,000, and five million shares were issued to directors’ in lieu of a portion of the fees that they are owned. The subscription and offer are still open. On the day of the announcement, the share price fell 1.13p to 2.13p. There was a cash outflow of £552,000 in the six months to March 2017.

Rainbow Rare Earths (RBW) has discovered several unrecorded veins at Gasagwe, which suggests that there is plenty of upside in the mineralisation resources at the Gakara rare earth project in Burundi. Mine construction is on course to deliver rare earth concentrate before the end of 2017.

WideCells Group (WDC) says that it is authorised to sell its CellPlan financial product that helps people to afford stem cells treatment. There are plans to start selling CellPlan to Biovault stem cell storage customers.

Cathay International Holdings (CTI) says that its 50.56%-owned subsidiary Lansen Pharmaceutical plans to pay a special dividend.

Andrew Hore

Quoted Micro 12 December 2016

ISDX

IMC Exploration (IMCP) and its partner Koza Ltd have started work on a mapping and rock sampling programme at the Goldmines River licence in County Wicklow and a licence in County Wexford. This work will help to prepare for the next phase of drilling.

African Potash (AFPO), which has lost its AIM quotation because of the resignation of its nominated adviser, has moved to ISDX, where Peterhouse is its corporate adviser. Dealings on ISDX commenced on 7 December. African Potash is attempting to build up a vertically integrated fertiliser mining, production and distribution business in the Republic of Congo.

Ashley House (ASH), which develops health and community care properties, is refinancing its loan from Rockpool through a £1.5m facility provided by Invescare Ltd, where Ashley non-executive deputy chairman Stephen Minion is one of the shareholders. The facility lasts until June 2018 and is secured against individual assets of the company.

Geologist Gareth Northam has been appointed to the board of Goldcrest Resources (GCRP). Goldcrest has raised £70,000 by issuing convertible loan notes to natural resources investor Pelamis Investments. The loan note is convertible into 28 million shares at 0.25p each – a price relating to after a planned 50:1 capital reorganisation.

Valiant Investments (VALP) has raised £40,000 at 0.1p a share in order to provide finance for 84.7%-owned apps developer Flamethrower. Kryptonite 1 (KR1) has raised £155,000 at 0.05p a share, while Imperial Minerals (IMPP) raised £35,000 at 2p a share.

AIM  (Latest AIM Journal available)

Fairpoint (FRP) made a profit warning just prior to the close on Friday but there was still time for the share price to halve. Dividend payments have been suspended. The legal services business has not been trading as well as hoped in November and December. The closure of the debt services business is on course to be completed in early 2017 but overheads are still higher than the management planned that they would be.

MP Evans (MPE) has sold its Malaysian joint venture and intends to pay a special dividend of 10p a share. The disposal will raise $100m and the deal valued the plantations at $13,000/hectare. That is more than the remaining assets are being valued at by the current bid. Kuala Lumpur Kepong has received 12.9% acceptances for its 740p a share bid. The disposal means that one-third of the cost of this bid will be covered by cash.

Expect more shares to come on to the market following the announcement that a further £1.15m of loan notes in CloudTag Inc (CTAG) have been converted into shares by L1 Capital. The conversion price is 6p but the market price has risen to more than twice that level. There are £50,000 of loan notes left.

AB Dynamics (ABDP) is raising additional cash to give it a larger buffer as it invests in its new facility. The automotive testing equipment manufacturer already had cash in the bank but it has raised £5.4m at 475p a share and it is offering shareholders the chance to subscribe up to £1m at the same share price.

Northacre (NTA) has been on AIM for 19 years but it has decided to end its association with the junior market. This is not a surprise because the main shareholder owns 94.3% of the company. That shareholder is offering to buy any shares at 100p each – a 35% premium to the previous market price.

Formation Group (FRM) has also decided to leave AIM but it is switching to ISDX. A general meeting will be held on 4 January and the property developer could join ISDX as early as 12 January of shareholders agree to the AIM cancellation.

Clean room equipment manufacturer MayAir (MAYA) says that it generated revenues of $52.4m in the ten months to October 2016 and there is an order book worth $20.4m most which should be recognised this year. This provides some comfort that MayAir can achieve full year expectations. Management still hopes to be moving into a new factory before the end of 2017.

Vianet (VNET) reported lower interim revenues but stripping out discontinued fuel-related activities revenues grew slightly thanks to the vending division. The core operations grew their profit contribution but higher losses from the technology business held back overall profit growth. In the six months to September 2016, pre-tax profit improved by 9% to £1.13m. The US loss in the leisure division was halved and the number of sites continues to grow, unlike the UK where the number of sites continue to decline. The vending division offers good potential for profit growth now that it is covering its costs and more of the additional revenues drop through to profit. The uses of the technology for the Internet of Things should help to boost growth. Net cash is £1.98m and the interim dividend is unchanged at 1.7p a share. A full year profit of £2.4m is forecast.

Gas and electrical services provider Bilby (BILB) is restating last year’s results. This will reduce reported pre-tax profit from £1.37m to £718,000. This is due to additional costs and disputed revenues. The share price is less than one-third of the level it peaked at less than 12 months ago. The interim figures will be published later this month.

Share (SHRE) has sold 20,000 shares in London Stock Exchange for £540,000. Share retains 100,000 shares in London Stock Exchange.

TV technology developer Mirada (MIRA) says the roll-out of its technology by izzi Telecom will be slower than expected and demand in Mexico is uncertain. This means revenues, particularly higher margin licence sales, will be delayed. This year the expected underlying loss is likely to be around £1.4m higher at £1.8m. Capitalised development spending is rising so there will be a significant cash outflow even when amortisation is taken into account. A pre-tax profit is not expected until 2018-19.

Armadale Capital (ACP) has announced a JORC compliant resource of 40.9 million tonnes @9.41% graphite content for the Mahenge Liandu project in Tanzania. This is a particularly high grade and it should be easy to extract – and that could be confirmed early next year. There will be additional drilling and a further upgrade could happen in the first half of 2017.

Evgen Pharma (EVG) reported interim figures in line with expectations and there is £5.5m left in the bank. This is enough to push ahead with two phase II clinical trials for SFX-01 and to investigate other potential uses. The results of the trials should be available in the first half of 2018. The US Food and Drug Administration has given orphan drug status to the treatment for subarachnoid haemorrhage.

Premier African Minerals (PREM) has decided not to increase its stake in Casa Mining from 4.5% to 30%.

MAIN MARKET

Project engineering consultancy Waterman Group (WTM) says that its performance has been in line with expectations in the first four months of this financial year. Exchange rates have helped to ensure a small increase in revenues in the period. This suggests that dividend growth will continue. Waterman has won work for the MoD, Brent Cross shopping centre and UK roads. The interim figures will be published in February. Michael Strong has been appointed as a non-executive director.

Andrew Hore

 

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